Options trading hours example nifty

First of all, hats off to you for all the good work you are doing. You will have to be the shareholder before the record date of the dividend. What does it mean exactly? Thanks for your hard work. However futures will remain futures. Of course there is a difference between the spot price and the futures price, which is due to the futures pricing formula. Once you get comfortable with futures trading I would imagine, like many of us you too would be actively trading the Nifty Futures. Go through it in detail, if you have questions post them here, we will be more than happy to give you a quick response and help you tru it. Generally the liquidity is on the lower side when you go outside the NIFTY 50 basket. How are buy signal and sell signal generated by the software system?

Does the chart of Nifty spot represent the cumulative demand and supply for the 50 stocks? Yes, sometime and for a short duration the derivatives market can influence the spot. Hence, I would not advice this method unless and until you have deep pockets to incur all the M2Ms. Well, you answered it yourself. Another challenge with deep ITM options is liquidity especially if you intend to trade large qtys. Nifty futures on the other hand has a diversified portfolio of 50 stocks. Index Futures or the Nifty Futures. As we know the futures instrument is a derivative contract that derives its value from an underlying asset.

If I trade in large quantities of futures midcap, will there be enough liquidity to find buyers? How does it happen? This means if the value of Nifty Index goes up, then the value of Nifty futures also goes up. You need to be mentally prepared to put in the necessary hard work. Is it possible to trade 10000 lots of banknifty? We discussed liquidity earlier in the chapter. So they square off their short positions in nifty futures. PI software can be run in IOS environment.

Having said that, check out pulse. Hence the Nifty Futures derives its value from the Nifty Index. You can trade how much ever you want. Now, if on the next day the stock forms another green candle, should I go long then? We will understand the concepts related to futures pricing in the next chapter. You may also be interested to know that besides Nifty Futures there are few other future contracts that are quite liquid in the Indian markets such as the Bank Nifty Futures, Reliance Industries, Tata Motors, SBIN, Infosys, TCS, ITC, DLF, Cipla etc.

You can read about impact cost in the same chapter or next I guess. When we are doing technical analysis on Nifty spot chart. For this reason, it would make sense to understand Nifty futures thoroughly. Nifty Futures go move 50 Bps? By this logic, I have tried intraday trading but I was unsuccessful. Definitely you do have problems with Pi. OR there will be any Holding Period criteria to be eligible for Dividend? As it is a portfolio of stocks, the movement of the Index does not really depend on a single stock. After which, I started using TA and which proved really helpful. Infy spot and selling futures.

In case of volatility we can expect better profit then why to buy liquid stocks? Do note a transaction of 20 Crs is not really a large one for a typical Foreign Institution. How to do technical analysis of Nifty Stocks as i could only see the Nifty Futures in Kite, It is impossible to see the price actions or the volumes for a period of more than 2 months. In fact you may be surprised to know that Nifty Futures is not difficult one of the top 10 index futures contracts traded in the world. Its a cumulative number and only increases as the day progresses. In most of the cases, my stop loss of money got hit by some wild movement in price, even though at the end of the day, I have found that my swing view on the stock was correct.

Again, no straightforward answer to this. However it cannot be sustained. When you place an order on amazon or flipkart, at a later point you can always go back and check for the status right? Now I am waiting for your response. Price was not updated properly when I logged in. Any thing that we can analyse and say that this day might be a trending day or a choppy day? Is it units or lot? Technical analysis works on supply and demand dynamics but there is no actual demand and supply for Nifty in spot market. This simpler terms you need to take a call on the direction of the index.

Can I trade 10 lots of nifty by bracket order? Nifty future does not have a corresponding Nifty spot instrument as far as I know. When you initiate a trade you need to have a trade set up, which defines your entry price, target price, stoploss price, and most importantly the reason for trade. In fact we have discussed about spread in chapter 10, which will be uploaded in a day or two. Good luck and I wish you all the very best. Be through with what you, be confident and place a trade. Is there some other alternative to represent the Nifty spot prices in an not difficult and accurate way? Nifty 50 shows the cumulative demand and supply of the 50 large companies in India and therefore it moves.

If you hold till expiry the exchange will settle the trade for you, so no worries. One cannot expect an exact price when its a market order. These stocks are selected to represent a wide section of the India economic sectors. Likewise if the value of Nifty Index declines, so would the Index futures. If I want to trade nifty futures, how do I do it in spot nifty without volumes. Does this mean that nifty should be in tight range this month as people have shorted nifty in a narrow upper and lower range which may would result in a small range of series.

However the orderbook is valid for the day. Yes, focus on few stocks and knowing their price behavior well is good. Thanks for all the information. Suppose, a I find a bullish engulfing pattern, prior trend is downtrend. Do we need to manually square of the Nifty future, before the end of expiry day or will it automatically gets squared of on the expiry day? One more query, a bit unrelated, during trading hours i have seen that many a times the total volume traded value decreases, it baffles me. Its highly personalized to you trading account and trading temperament. Sir, I am new trader.

One of the main features of Nifty Futures that makes it so popular is its liquidity. The overall market volume data provided by the exchanges is equivalent to the volumes data. So if I were to do a round trip, I would clearly lose money on it. As you know the Nifty Index is a basket of 50 stocks. Never enjoyed reading like this before. Third, suppose I bought 2 lots of nifty future and after some days I want to square off. Now, I look at the stock from dow theory perspective and look at the weekly chart and find that the primary trend is downtrend. And after reading your module on Futures, carried out my first trade today in Nifty Futures which turned out to be quite profitable. It really depends on the liquidity.

FA before I read your module on TA. Nifty futures are less volatile compared to individual stock futures. Futures trade but now have got some good understanding after going through the modules. Well when you place an order, the first requirement is to ensure you specify if the order is a buy or sell. Thank u very much sir for your prompt reply. Zerodha but not invested yet. You can trade Sensex futures. Can I choose any NSE50 future contract? As far as i know you cannot carry shorts in the cash market overnight.

Technical Analysis works best on liquid instruments. So when you look at the futures data its appears continuous and analysis friendly. ET in its editorial critised this though CEO of Zerodha praised the move. So I have a decided to include Nifty, Banknifty and Nifty Top 10 stocks only in my Opportunity Universe and scan them regularly for opportunities. But a lot of issues are now arising which I have not faced even 2 months before. From my experience, doing the former is much easier than the latter. This also makes trading Nifty Futures a much better choice as compared to single stock futures.

If Im not wrong, it has to be done on the underlying, ie. For every one point movement in Nifty, you end up making or losing Rs. Regarding the traded volume, are you sure? SEBI has proposed compulsory physical settlement in stock derivatives contracts. Markets are just factoring in this and adjusting accordingly. Let us now proceed to understand what liquidity is and how one would measure it. If you expect the index to go up, it implies you expect the overall economy to improve. The loss of money is expressed as a percentage of the average of the bid and ask price. You may call me right now as I am sitting in front of my computer. Suppose there is short built up in nifty futures. Clearly the number of shares in the market is lesser than what is required, hence the MRF counter is considered shallow or illiquid. You cannot learn swimming by reading a book, likewise the real experience of trading lies in actual trading.

Today for the first time I was going to trade in Nifty Future. NSE aims to keep the contract value constant, but as price changes so would the contract value. Nifty, Infy, RIl etc. What is physical settlement for stock as well as index? Within the Indian derivatives world, the Nifty Futures has a very special place. Assume a foreign institutional investor intends to buy 5000 shares of MRF Limited. Can you become a good doctor overnight? Right now both interactive and broadcast signals are green. Sometimes, especially in the last week, why is the value of nifty futures less than the nifty 50 indx.

From what I see, you have spent the last 2 years trading with no success. MRF stock is currently trading at Rs. ITM may becomes ATM or OTM. Again when you place market order, if the stock is not liquid then the price at which you transact will be very different from the last traded price. Best is to separate investment stocks and trading stocks. However I personally prefer to do all my analysis in spot and then execute trades in futures. Sent email with attached file. The changes would be communicated through your broker.

Hence there is virtually no scope to manipulate the Nifty index. Deep ITM options do have limitations. Market depth keeps changing based on demand supply. Data providers usually collate the current month futures data and give it out as continuous data stream. So how do you use this information? MRF is highly illiquid. Yes, you can do this. There are Nifty ETFs, but they do not track the Nifty spot price closely enough.

So can I do the analysis in nifty futures itself. ET where he said that it would be boon for hedgers and might be better if it would be combined with the exchange stock lending and borrowing platform. So this could be detrimental for trading in really large quantities. What should I do in this case? PM, please do attend the same. Nifty futures require much lesser margins as compared to individual stock futures. IN that scenario can one take one lot of nifty at current price and add one more lot if it goes down to 7500 without worrying when it will bounce. This makes Nifty a good representative of the broader economic activity in India.

At times taking a directional call on a single stock can be a tough task, this is mainly from the risk perceptive. What is the relationship between disclosed and undisclosed qty. Keep this as a benchmark. You need a plan and you need to stick to it no matter what happens. Sometimes when we are trading Nifty futures based on TA, there is a chance that a news might not come to our notice which has a huge impact on Nifty thus triggering our stoploss and ending in loss of money. Is it an offence?

Experience it and learn from it. Also what can one infer is there are more units sold than bought? Zerodha customer was trying to understand what STBT and BTST orders and How can I trade in this for Nifty Future? NSE site I see trading volumes of top 20 stock futures as 7000 or 8000? In my opinion, this is the best way to start! So how it leads to rally in underlying cash market based nifty index. Track the spot execute in futures.

Besides there is so much liquidity that you can literally transact any number of contracts that you wish. There will be impact cost in all trades. No issues with that. What would be the ideal stop loss of money if I am trading 1 lot of Bank Nifty on 5 minute time frame? For this reason it is really tough to interpret the order book information and derive some meaningful information. Nifty 50 scrips for the given day. Let us take up the example of MRF Limited to understand liquidity.

Request you to spend the next 3 or 6 months by sticking to the rules and generally the checklist that we have discussed in the TA module. Similarly the orderbook in your trading terminal. Next time you call your broker to buy or sell a stock at market, the price you see on your screen and the price at which the trade executes may vary, do remember this is attributable to the impact cost! First of all let me thank you for your efforts in making such a complex subject in such a simple and not difficult to understand modules. So even if you the stock around 20th its fine. Hence ppl prefer to trade futures. Why do you want to spend money when everything is available to you on Varsity for free? The large transaction you are referring to must be end of day cumulative value.

Is there anything like more STT charges for futures, like in the options, if it is ITM on expiry. Will that not result in manipulation of the price of the futures contract? However before we proceed any further, I would request you to refresh your memory on the Index, we have discussed the same here. Thanks for Karthik for the support. For entry order, you will be charged 20, but for the exit, you will be charged based on the number of trades. Likewise to be a consistent trader you need to put in a lot of efforts. In the context of Nifty futures, the underlying is the Index itself.

But Nifty future chart as well as share prices are not updating. Or because it is a very liquid script it will get executed exactly at 8010? Yes, you can as long as you have a valid trading account. But what about the Nifty Futures contract? Translating this to day to day movement is hard. Such situations are called short covering or the long unwinding. If I want to trade Nifty futures, and let us say my analysis needs past 6 months of continuous data, where should i conduct my anaysis as the contract expires every month? The problem is that the movement in stock can happen anytime during the timeframe opted in swing trade.

The basic assumption when you trade based on TA is that the news is already factored into to the price! You can buy any company and its futures. Thanx for the reply. So naturally there is a mismatch in buy and sell qty, likewise in the stock market. Varsity since May, 2016 and placed my first trade in nifty option in June this year and booked some profit. For example let us just say I decide to buy Infosys Limited with a hope that the quarterly results would be good. Nifty Future trading from coming April.

Thanks for the kind words Anand. When you place an order to buy or sell a stock the record of that is maintained in your order book. Glad to know you are enjoying the content here! Do you know anything about their Technical Analysis course? For Example: If I was trading 1 lot of Bank Nifty at 8000 and my stop loss of money was at 7950, and I got stopped out at 7950 what would be the loss of money based on tick value and tick size for Bank Nifty? BO where all lots brought and sold in one order each executed for buy and sell trades? When you opt for a disclosed quantity, only a part of the order is displayed and the rest will be hidden from the market. Higher liquidity means tighter bid ask spreads, hence impact cost is lower, hence it contributes to lesser volatility. So this months nifty futures expires on 29th dec.

Liquidity is the ease at which one can buy or sell a particular stock or futures. Further in blue I have highlighted the Nifty Futures price which at the time of taking this snapshot was Rs. Here all the activity is taking place in nifty futures. Also if you have no success in intraday trading try positional trades for few days. You can buy Nifty futures but to buy Nifty you will have to buy Nifty ETF. Only the nifty futures have the volumes. If the trade hits the SL, then it is always advisable to exit and look for another opportunities. Also a good fundamental stock should be taken as a long term investment. Please do the needful as soon as possible. Hence place mkt order only in stocks which have good liquidity.

So far, I hv no clue of it. Trading the Nifty futures requires one to take a broad based economic call rather than company specify directional calls. There is quite some difference between the Nifty ETF NAVs and current Nifty levels. These details should give you a basic overview of the Nifty Futures. Of course technically you can trade the stock you have invested in but that gives raise to biases, which will influence your long term thinking. Rest of the things are usually driven by the trade itself. This is when NSE decides to either increase or decrease the contract size. Since the Nifty is so highly liquid you can literally transact any quantity of Nifty without worrying about losing money on the impact cost. Of course you can.

Thanks for this helpful material! Does the market order get fulfilled? Yes, you can do that. Thanks for the kind words, Sundipta. Most of it is waste. What is your take?

For example, if the exit of 10 lots happens through 3 trades, then you will be charged for 3 trades. It will be market manipulation? Sir, Is it ok to take future trade of a stock after analysing the spot market chart of that stock? But I was outside of my residence when you called me. Hence it always makes sense to trade large liquid contracts. It could happen in 1 day or may happen on the 5th. But can NSE market making program or brokers see the full quantity? Is there any way to find out if it is going to be trending day of a choppy day? No, at the end of the series, the futures and spot tend to converge.

But I got a small doubt. The price is affected only when a trade is struck. Nifty to some extent but not on an everyday basis. So if someone is placing an order just to cancel it very soon, then it would not matter to the price. Knowing about the impact cost is particularly helpful while placing a market order. Am I doing it right?

Could you please let me know if we have IOS version PI Software. However, at 10K lots on BN, you maybe hitting a position limit. Hence options are not as straightforward as futures. What should we do as a day trader, trade the dec month contract or the jan month contract? However, even if you place a market order on Nifty, it is unlikely you will get 10 points higher. If you wish to buy large quantity of shares, then you need to look at how many shares are being offered in the market. NSE with minimum target and SL? Request you to kindly look through the chapter when done. MIS position to NORMAL position?

Its been very useful. On which assets one should trade more liquid or more volatile? No, in one shot you can place an order for 200 lots. Sir, Thanks for your reply, Iam a positional trader, I am exiting some good fundamental stocks like Yes bank, Glenmark, Ultra Tech when they are hitting my set stop losses. Maybe you can calculate the impact cost for a few of these futures contracts to get a sense of their liquidity. So, those levels becomes our anchor levels to write the call or put options above or below it to take the benefit of time decay. Good to see you are finding answers to your queries. Now time decay opportunities will be available 4 times in a month as compared to once every month. Check which options has higher open interest and changes in the open interest to understand which market is seeing as major support or resistance near your anchored top or bottom.

If even after reaching resistance market starts to show increase in open interest in puts expect market to keep going with current up trend. Say, BankNifty is at 18000 and 17800 call is trading at Rs. The 17800 call option has no intrinsic value while you are paying Rs. Writing an option puts you at a great advantage as the decay of time value works in your favor. Just like buying options is always not the right method similarly writing options is always not the right method too. Disclaimer: Please note that all the information shared is solely for the general information purpose only. Therefore, newcomers should not fall under the trap of trading options by buying the cheap calls or puts just because they are trading at low prices. Hope it helps answer your queries rightly. Till then you can read a short one on Charting.

Hope to continue the same in the future. So if on any day the bank nifty index rises in the last half hour then surely settlement price will comes out somewhere in between the last half hour range. This is not the only way to trade options but there are other strategies that we may follow which with time will keep on sharing. Therefore, always first analyse and give complete importance to the understanding the what the bank nifty is expected to do in the next few hours to day to decide what is best method to adopt to trade bank nifty weekly otpions on or near expiry. But as the markets current trend is up and momentum and volatility is huge so we may skip writing the call this expiry as the market can still continue the up trend and even opens gap up tomorrow. Whenever markets are not forming any clear bullish or bearish pattern and we are unable to find places to enter the market and place our stop losses so cannot buy options, then writing of options of strike price above or below the major anchored top or bottom is the only way for the trader to take the benefit of time decay on or before every weekly expiry.

But if you are trading for intraday say writting on the day of the expiry, then you might be able to do one lot of short selling at 20k by getting intraday MIS exposure. By this we do not mean that buyers of the options do not make money or we should not buy the options anyhow? Bank Nifty Options Chain. To check the most active bank nifty options. So, sellers expect the market will not go up above the strike price of the call option he has sold and not go below the strike price of the put option he has sold. Ask yourself why some has so much of interest in these far away option which has high open interest? Also, check if the market is near some major resistance top or support bottom. Why New Traders Feel that Options Trading is Like Gambling?

Pricing of the options are majorly driven by the price movement of the underlying which in this case is Bank Nifty Index. At present it is approximately Rs. There is a reason why it is trading at Rs. REALLY NICE POST AND ENJOYED READING IT. Many traders do not feel confident in trading bank nifty futures even after they do a great work on research but they are good at evaluating after certain price action of the market what levels markets are not expecting to move above or below. Earlier, only monthly options contract were available for trading for all instruments including stocks and index whereas now you can trade in Bank Nifty Weekly Options contract where the expiry day for these weekly contract is Thursday of every week. This will help increase participation from all variety traders so there will be less gap between bid and ask prices. And more consistent when trading bank nifty weekly options. Any number of queries. As traders we never launch market orders.

An important point to remember here is that the options will expire as per the settlement price of the underlying which in our case is Bank Nifty Spot Index. Win Situation for Every One. Also, when you are trading Weekly bank nifty options, then the time value will evaporate very fast after the close of Tuesday. Weekly option puts are excellent and cheap hedges to cover other positions long term holdings while far weekly call options are great tool to work as Covered Call to write high probability bets. These elements will help transform you from a Aspiring Trader into a Legendary Trader. This we have discussed at the end of the post outlining the benefits of writing an option than buying options.

So, call and puts which will be available at very cheap cost can be bought to take the benefit of the volatility. What levels it will not break. So, it is not the price at which the option is trading rather it is more about evaluating the probability that we are expecting for the success of the trade. This illustration seems to be so not difficult to trade. Like what happened on the day of brexit. It seems to a good place to start and feels to be a magical wand which will lead them to new heights by simply buying the cheap OTM options and make big lofty profits. Also, some times during the expiry day which will happen once or twice every month, market will be near the major resistance or support levels.

So, whether the profits are small or large it should be sure which will help a trader to take big positions and make big sure profits. So, options trading involves not only predicting the expected price move of the underlying but also to access the time frame within which that price movement will happen as you will be paying the time value when buying a options contract. There are many many other ways to trade in the market. It is very important to understand what constitutes within the premium price of the options contract. So, even after the bank nifty index has risen from 17700 to 17800 the seller is in the profit. No information, views, opinions or examples constitute a solicitation or offer by JustTrading. Expecting What the Bank Nifty Index will not do in the next few days? The objective to detail out about options and writing method is to show you how big traders create a lot of positions by writing options according to the market conditions. Say if a trader can understand the position of the market and conclude that the market has rallied big and now sitting at a major resistance of 18000 which requires consolidation to happen in a big band to decide whether to go further up or starts correcting then they can sell the call option of strike price above 18000 mark as they will expire worthless if the market may not go above it. How to Trade Bank Nifty Weekly Options?

Out of the Money calls. So, even after the bank nifty index has risen from 17700 to 17800 but you did not made any profit because you paid the extra value of Rs. In other developed nations, weekly options are available for trading on index as well as stocks to help traders hedge and take short positions on according to market conditions. Heartful thanks to you for sharing such words. Traders can evaluate and understand the major trend of the market and can take positions accordingly. If you have shorted the bank nifty 20800 call at Rs. And, how professionals trade the markets to avoid committing the same mistakes again and again. Will be more than happy to discuss and learn new things from traders like you. So, atleast you will require 60000 these days to carry overnight position in options selling. But Do You Know that we can even get trapped and lose more than the value of the premium even when you are buying options and what if I tell you that you can incur loss of money even after having a profitable trade.

Hope you do not take me wrongly. But we cannot write the call options after this crash. So, portfolio hedging can be done by buying weekly puts at low cost. So, these weeklies will help them to have a better control on their trades as now they have to foresee the market for 5 trading days and not more than what will happen in the next 20 days. Save your time and frustration. Are they really buying it all because they are trading at cheap price?

Intrinsic value is what the options real or self worth is. Looking forward to read more similar stuff. There are another set of traders who just get active on the last 2 hours of the expiry day. As the volatility is huge so writing of options or carry any over night position specially when writing options in not suggestive as market map open with gaps the following days. Buying Options as the risk is limited or Selling Options which has more risk involved? Actually, we have shared all the links in between to other article which relates to basics of options, bank nifty futures, etc to help new comers to get the grip on options and bank nifty. Your comment has also triggered my passion to right more great stuff. Writing options requires full margin to trade as in the case of the futures trading. Make big profits and achieve Sensational RESULTS.

Write the option above or below the major levels as and when market moves towards it but when it is still far off from major levels. Also, apart from weeklies, there are long term options on index and stocks are also available for trading to take big time positions by paying loss of money cost. While when you are selling an option you will be receiving the premium price for giving the buyer the right to buy the option which includes the time value which usually works in the favor of the sellers of the option contract. As now the trader can take positions in weekly option contract by paying less premium than he had to pay when entering the monthly contracts. Now traders who would like to take positions in Bank Nifty can do so by buying calls or puts at a price lower than what was available with monthly options. Worthless and all becomes an Apocalypse. How to trade BankNifty? How to Trade Options?

Weeklies will help traders to take positions for big events like RBI policy, Brexit, Election Results and that too with very less risk. You might have read and heard million number of times that the risk with buying options is limited to the price of the premium paid. As most of the content talk only about candlesticks and technical indicators. How to Make Money from Trading in Indian Stock Market? There is a slight margin difference between the different strike prices where the 60K might become 65K or 70K. So, they may know that the market find sellers coming in from the top again or buyers from the bottom.

So, it totally depends on what you are good at calling the market? Pricing of options are done on the factors like Value of underlying, time to expiry, etc. There are some option software vendors in the market but we have not reviewed them till yet. It has something to deal with the risk of the trade. As just because 18000 Bank Nifty Weekly Call Option is trading at a cheap price of Rs. You should know that the when the markets are not trending, stuck in band during the expiry days and no trending pattern is getting completed to let the market run in fast momentum in very short time frame then you can make out the important support or resistance levels which market may not break with higher probability and write options. They think that trading is all about being in front of your trading desk every single day, and buying and selling left and right.

As most of the big traders use options for writing and pocketing in the value of time decay. Why Out of the Money Options are the Most Active Contracts? The major drawback of this method is that it did not give us place to put up stop losses as even after shorting the option, the premium can rise with the movement against but still not move above or below the strike price and later become Zero. Sir, Great series of articles. As with monthly options, a lot of aligning of positions were required to be done within the month. Thanks a lot Karthikeyan for such inspiring words. So, to judge out where the options will head towards it is important to give due consideration to where the Bank Nifty Index will move. At 17900 mark, market has formed a double top which may again create a lot of problem for the market. Traders have a tendency to book the profits during the last hours of the trading day when the market has moved in one direction during the day.

And believe me you will need to learn a lot of patience to understand the market, framing up and following your trading rules. Thanks a lot for explaining options in an not difficult comprehensible manner. Now it is much easier and cheaper to deal with hedging for event risk using weekly options. Dear shri Madhav Ji. In other words, what will be the value of the option if the contract is to be expired just right now. You can also share the ones here, if u find some good one. When you know that the market will rise or fall because of some pattern completion on charts or some other reasons, then it make sense to buy options and achieve some pretty good results. So, the technical trader is at the advantage as they have this other key swords to understand where the markets will head towards within few days. There is no clear pattern forming up to conclude which levels can be act as anchored place to take stop losses as market in current phase is in strong intermediate up trend with no corrections. Always it better to place in limit orders when trading the options for such small price gap as many of them have big bid and ask price between them.

So the time value will become Zero. By the way, thanks for complimenting and we are also happy that you loved reading it. Above post has very confusing language. The premiums must be trading at very low levels of Rs. Then you need to read this. Leave your answer in the comments, share this with others. But as we analysed that the market was coming to a major support level of 17500 where it had a big consolidation and went up earlier. This may not require much to predict the quantum and time of the move rather estimating what market may not do till Thursday. Also, if next day the premium went down and close to Rs. Do you know that the biggest mistake that most traders commit is that they think they should trade everyday. As a new trader, it is important to make your trading task more simple. But Responsibility to use it wisely is what makes the miracle to continue.

An open environment where our readers can ask us anything they wish to. Which levels market will not break now. Investing in Indian Stock Market. Weekly options has surely widened the scope of trading opportunities available for a Bank Nifty trader. But Remember, Whenever markets are trending strong in one direction and volatility is there then you should surely avoid writing the options as this may increase the risk and go all against you. Bank Nifty Index more than the strike price level. So skipping writing calls is what makes sense with buying calls or writing puts will put us under great chances of success.

Chart readers are always at advantage as they can see other important aspects that is not considered while evaluating the pricing of the premium. Small But Higher Probability Profit. Hopefully, we are going to see more weeklies on Stocks and other Indexes. If you have sold short 21000 call and you wish to carry the option then you need to take care of M to M loss of money everyday as future and options are settled everyday. This will help you to know the most important levels as support or resistance the market is betting on. Similarly the seller of the options will have to predict the market for few days to take the benefit of the opportunity by writing the bank nifty weekly options. This will generate a very small profit but will put the probability of working right in your favor. So, as you have shorted it at Rs. Now, we can analyse the market position early on the day of the expiry to conclude maximum it can move up and down with in the day. Ever wonder how many traders have made their trading career just by trading bank nifty futures successfully? This can also be justified with increasing open interest in calls and puts which shows big writing off these options.

Trading on these days requires you to take positions on both directions of the market as we are expecting momentum but not sure of the direction. From the table above, the 17900 call option is trading at Rs. This happens because of the fact that the trader need not to be right only with the direction of the price movement but also has to be right with the timing. So a quick entry or exit can be done without worrying. So, you will have to bear a total loss of money of Rs. Bank Nifty Options Strike Price has a gap of 100 points within each contract. Suppose, you shorted 21000 call option at premium of rs. And yes, lastly increased participation will leads to more income to exchanges and brokers. Similarly, there are ways when we can buy call option with a close stop loss of money for intraday when we are expecting bank nifty to complete a pattern and getting ready to rally and make decent money on our trade. Also, there is a major gap down from that level so even if market will reach that level it will just close the gap.

Market spends time for consolidation after big fast up or down moves which serve as an advantage of writing options to profit out from the time value decay. Really good to hear that you like our post. Earlier the writer or buyer of the options faces a lot of trouble and need to keep in aligning their trading positions as there was big time gap between the expiry of the contracts. So, who the hell is making money if we are buying options all the time to take less risk and ends up with worthless options? Seeing the trading for the complete day they come to conclusion for the new levels which market will now anchor as resistances or supports. If you really want to avoid big trading losses, you need to have some facts and reasons to trade. As we outlined, the option premium has the intrinsic and time value at all the time. If you see the chart 2, the market started to consolidate in a band after the rise which benefits the option writer. Always go with the charts and try to write the call or put option which is far away from the current market price but has strike price close to some important top or bottom.

But when the trend is strong or patterns for bullish or bearish moves are there then writing will surely not be fruitful or sometimes may out the trader into trouble when the market reverses and corrects fast. So, writing of calls seems a bit less attractive where if we go with the current trend of the market and high increasing open interest in puts of 17500 and 17600, the writing of puts or buying call seems to be a better choice on the expiry day tomorrow. And, they fall under the trap. But this requires you to be very right with your analysis specially with the direction of the market. To help all get the core of the thought. This really gives us a feeling of satisfaction for our effortful work. Also, refer to the Recommended Trading Books that helped us in our trading.

Why would the call or put option which does not have any intrinsic value rather all the price of the premium is the time value are actively traded? Further, if you have any more questions. If we can make up that market will not rise or fall below some major levels then we can start writing the options to take the benefit of the time value decay. Thanks a lot and we are delighted that you liked our work. As options pricing do not consider these technical aspects of markets, so the right analysis becomes a sword for the trader to make great trades with higher chances of success. Some sentences are absolutely beyond comprehension. Each type of concluding evidence will help you decide what method to choose to take the utmost benefit. Margin for shorting options is more or less similar to what is required to trade in bank nifty futures. Also, if the market has been swiftly moving in a single direction though out the day and reaching the major sellers or buyers area then traders who bought during the day starts to book profits before the close.

As on day of expiry, the market had a big fall within the first few hours of the trading day. We are working on writing content on chart reading and how traders can use chart reading to refine their trading further and get an edge just like professional traders. In many places above you have covered call and put actions together. But simple, short, precise structure will help novices like me to appreciate your work. Trading Everyday is a Silly Plan similarly Trading on Every Expiry is a Silly Plan too and more silly with similar plan every time. Wednesday as now only one day is left for the expiry of the June Contract. We started this with the same thought of helping new traders to not commit mistakes that we even fall into during our early days. Therefore, we need to anchor the major support and resistance levels of the bank nifty index which will serve as an anchor for us to trade in the coming two days till expiry. Sir, please excuse me. The one we shared in this same article is the one we generally use to trade during or near the expiry.

Traders by analyzing the charts can make up that market within few days may not break the major resistance or support areas. Bank Nifty crashed from 18000 to 17000 and returned back to follow its current up trend. Getting into Real Trading is complicated. So, now they can do so by trading every Week. So, be sure of why you are buying or writing the options. Get deep into understanding how the options trade work in real market.

Also, you will have to maintain the total margin requirement which these days will be approx. Traders get active during the last few days of the expiry to write OTM call and put options. Do not confuse it with the last traded price. This requires us to trade with conservative thought and will give us another anchor point to consider as support which now is 17500. We here would like to make it clear that it is not that we do not buy options. Market may not go above or below it just because traders are reluctant to enter new buy or sell positions at the end of the day to avoid carrying any overnight positions whenever the markets are near these major levels which may give surprises by tomorrow morning gap up or gap down. Choosing a right option contract is very important specially when writing the options. Again, as options pricing do not consider these technical aspects of markets, so the right analysis becomes a sword for the trader to make great trades with higher chances of success.

Buying will be profitable only when we can analyse and predict the direction and a big price momentum in the underlying while selling can be profitable when you are right with the general thought that market may consolidate or not go above or below some major psychological marks. So we have to wait for the market to rise up so that we can start writing the call options of 17800 or 17900 and digests in all the premiums with the time decay. If market did not reached the levels till the closing time then these call options will expire worthless or in other words will become Zero. Its really motivating for us to keep up the pace for sharing more great content. Can you make it up that the markets are going to spend time before going up or down or the markets are going to be blasting up or staging lower? Even our other readers will be happy to know new sides and problems they can face while trading bank nifty weekly options. Options give an edge to you as a trader to make money even when the markets are not trending and stuck in consolidation band. So, it would be better to rather write the 18000 call option to receive the small premium value as there are higher probability that market may not reach that mark till the expiry.

The big consideration here is to first know and understand the opportunity and probability of the success of the trade specially when trading options rather than the cost of buying it. Let me try contracting some and find which are worth buying. Once we do it we will review it here on the website. Some traders are good at analyzing the big picture and can evaluate that the market may not break some support level, resistance level or will go lower before going up, etc. In some places you have talked about call, put, buying and writing in a single breath. When you have shorted Bank Nifty 21000 call that means you are expecting market to expire below 21000 to pocket in the full premium amount of Rs. But when I fire my order on Wed, the volatility brings price down to 4 Rs within first 20 minutes of trading and then not sure if there is any juice left in it. Because if the trend is strong and markets are drifting in one direction from last few days and you still follows the similar method of writing options to get few profit points you might get into trouble. While on the other hand, Selling options involve selling calls or put options of the Bank Nifty Contract.

If volatility is high and a trend is underway, wait to see the market movement in early hours on the day of expiry to take any positions. Options Contract with which you can spot and catch more opportunities. Bank Nifty Index for trading along with the third month monthly expiry contract. If you have any other query, do post it here. There are a lot of content available online but unsure of any crisp and clear on chart reading. So, this may push the market lower or higher and not breaking these major resistance or supports.

Even an experienced option trader cannot make a head or tail out of it. It will help reduce a lot of ambiguity with the reduce time gap to expiry. If we are wrong about any of the above, then it will result in the loss of money of the premium paid. So, under such cases, always wait till the day of expiry and trade as per the market move which happens in the early hours. So, the task here is to analyse the big picture of the market till Tuesday or early Wednesday to forecast where the market can go maximum up or down till it expires on Thursday. Get get on with our shoes and get ready to design ideas, strategies to make money from these weeklies.